Net income surged to 54 billion rupees (R9.4bn) in its first quarter to June, the Mumbai-based company reported.

That surpassed the 37.9 billion rupees median of 34 analysts’ estimates and was the biggest profit increase since the three months to December 2010.

Revenue climbed 38 percent to 646.8 billion rupees.

Earnings were boosted by contributions from Jaguar Land Rover, where profit before tax rose to £924 million (R16.5bn) on demand for the F-Type convertible and Range Rover SUVs. The luxury unit is helping to buoy Tata Motors, which is struggling to revive the profitability of the Indian business, which sells Tata brand cars, buses and trucks.

“Jaguar Land Rover is performing quite well,” said Juergen Maier, a fund manager at Raiffeisen Capital Management in Vienna.

“The next big thing to watch out for will be the [Jaguar] XE, which will take on the BMW 3 series and the Mercedes C Class.”

Shares in Tata Motors rose 3.2 percent to close at 446.55 rupees in Mumbai yesterday, before the earnings were announced. The stock has climbed 60 percent in the past 12 months compared with a 36 percent gain in the benchmark Standard & Poor’s BSE Sensex index.

Deliveries at Jaguar Land Rover, the main profit contributor, climbed 22 percent to 115 596 vehicles in the quarter, bolstered by the Jaguar F-Type, which began shipping last year, and the new and refreshed Range Rover line-up.

Tata Motors is striving to turn around its local business.

The brand will unveil its first new car model in five years today. The compact sedan, called the Zest, was developed to revive profitability at the Indian business as it has lost market share to Maruti Suzuki India and the local unit of Seoul-based Hyundai Motor.

Domestic passenger vehicle deliveries by Tata Motors fell 37 percent, according to the Society of Indian Automobile Manufacturers. The company’s truck sales dropped 25 percent in the same period.

“The domestic business has been a drag,” Maier said.

“But we hope that with the new passenger vehicle models and the commercial vehicles picking up, things will get better.”

The local business of Tata Motors reported a profit of 3.94 billion rupees.

The vehicle maker’s luxury unit is also building a mid-size sports sedan called the XE, which it will unveil next month and will go on sale in 2015.

The Jaguar XE, which will be unveiled in London on September 8, would be the only car in its segment to be built on an aluminium platform. That would help reduce its fuel consumption to 3.1 litres per 100km, the company has said.

The XE model will feature four cylinder, 2-litre petrol and diesel engines built at the company’s new engine factory. – Bloomberg